2010 Fiscal Year Final Research Report
An Economic Analysis of Utility Smoothing
| Project/Area Number |
20530146
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic theory
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| Research Institution | Kyoto University |
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Principal Investigator |
WAKAI Katsutoshi Kyoto University, 経済学研究科, 准教授 (80455708)
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| Project Period (FY) |
2008 – 2010
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| Keywords | 経済理論 / 意思決定論 / ミクロ経済学 / 行動経済学 / 金融経済学 |
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| Research Abstract |
I have extended theoretical research on a "preference for spread", that is, a tendency that a decision maker prefers spreading good and bad consumption over time. First, I have demonstrated that if the decision maker's preferences satisfy a "strong" notion of the preference for spread, to lower the volatility of a consumption sequence, the decision maker may prefer reducing a consumption level of a certain time period. Second, I have shown via a consumption-saving problem that if the decision maker's preferences satisfy a "strong" notion of the preference for spread, even when interest rates fluctuate greatly over time, the optimal consumption sequence has a low level of volatility of consumption. Third, for an evaluation of consumption sequences that involve risk, I have introduced a framework in which the decision maker whose preference satisfy the preference for spread shows an aversion to decreasing consumption sequences far greater than appreciation of increasing consumption sequences.
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